A South Florida couple who pleaded guilty to lying about being “farmers” in suburbia in order to qualify for federal COVID-19 relief funds were sentenced to prison Wednesday.
Latoya Stanley got 18 months in prison, while Johnny Philus received 30 months.
They hauled in more than $1 million in Small Business Administration loans while pretending to operate not only a couple of nonexistent suburban farms but also a beauty supply store and an auto leasing business, according to authorities.
Their SBA loan applications were a fiction, the North Miami couple admitted in federal court.
U.S. District Judge Marcia Cooke ordered Stanley to pay back $192,681 to the government. The judge scheduled a restitution hearing for Philus in August.
Stanley, 38, and Philus, 33, were arrested in August and charged with committing wire fraud and making false statements when they applied for SBA loans under a federal program that provides financial assistance to businesses ailing from the impact of the coronavirus pandemic.
As in a dozen similar federal fraud cases filed during the pandemic, the two defendants’ SBA loan applications were approved by a local bank before being guaranteed by the federal agency. The couple claimed they operated businesses with dozens of employees and payrolls of millions of dollars — before their four loan applications were approved. The bank, which reviewed their Payroll Protection Program and Economic Injury Disaster Loan applications, was not identified in a criminal complaint.
In their government loan applications filed in May and June, Stanley and Philus claimed to operate two businesses — Dream Gurl Beauty Supply and Elegance Auto Boutique — out of a duplex building on one-sixth of an acre at 1275 NE 118th St.
State records show that both businesses were inactive. However, the beauty store said it had 18 employees with $200,000 worth of inventory, while the auto business said it had 29 employees and leased a fleet of 40 to 50 cars worth $1 million, according to a criminal complaint filed by federal prosecutor Brooke Watson.
Stanley also claimed she ran a “farm” at 1275 NE 118th St., and Philus said he operated another “farm” at 535 NW 127th St., another small residential lot in North Miami.
Dream Gurl received a Paycheck Protection Program loan of $302,860 to cover payroll guaranteed by the SBA, and Elegance Auto received a PPP loan of $538,325 also secured by the federal agency, according to the complaint.